Thursday, December 16, 2010

Christmas shoppers are thronging to stores for last minute presents to surprise family and friends. Even in these uncertain economic times, the spirit of giving seems to be alive and kicking. One of the hotter items this season—actually the last three seasons—continues to be eReaders. Kindle, iPad, Nook, Sony and others are jockeying for position to be the hottest number on the shelf.

It seems consumers in large numbers have finally begun to understand what these gadgets are all about. As people get used to the idea of books in digital, portable form, mor eReaders are selling. Several factors have caused this astounding rise in sales: affordability of eReaders, mobility of devices, competitive prising, storage capacity, and a growing awareness of where this market is headed. Everyone seems to be interested in learning about this new age of publishing.

Last week, I took my youngest daughter to a basketball practice and carried my Kindle to catch up on my reading while I waited for her. As I pulled the digital reader out, a woman sitting next to me saw the device and began asking questions. She had never seen an eReader in person. I showed her how simple it was to operate, how eye-soothing the e Ink is to read, and tried to demonstrate the device’s capabilities. The woman became a believer in just a few minutes. She wanted to know where to buy it for her son. She left for a few minutes and returned. "I just spoke to my husband on the phone. Can he come over and see how this thing works?"

Santa was going to be making another stop at that household—if there are any Kindles left to buy before Christmas.

People do not seem to balk at the prices, even in these hard economic times. At a price tag starting at $139 for a Kindle to the top of the price range for an iPad ( $400-$900), these movable libraries seem to be selling faster than a Ponzi scheme.

The Kindle continues to be a Christmas sell-out gift. As of November 17, the Kindle 3 and Kindle WiFi were already sold out for customers living outside the U.S. and UK. In previous Christmas seasons, the Kindle sold out in 2007 and 2008. In 2009, Amazon's digital reader remained available throughout the holiday season for the first time. Don’t hold your breath for Christmas 2010. Stock is dwindling fast. Amazon is holding on to its remaining stock to sell exclusively in the U.S. and the U.K.

How well is Kindle selling? Amazon has always been a little shy about revealing numbers, but the company’s “Official Kindle Team” sent this out to their readers last Monday: “Thanks to you, in the first 73 days of this holiday quarter, we’ve already sold millions of our all-new Kindles with the latest E Ink Pearl display. In fact, in the last 73 days, readers have purchased more Kindles than we sold during all of 2009.”

At least one Kindle competitor—Barnes and Noble—seems to be enjoying a healthy buying spree of its own. In a recent Publisher’s Week article, Barnes & Noble Chairman Len Riggio said, “B&N is manufacturing Nook Colors at a rate of 18,000 per day and it is loading up a 747 every four to five days to bring devices to the U.S. from China.” He acknowledged that B&N might not be able to keep enough in stock to meet the need of holiday shoppers.

What about Apple’s iPad? Although this is like comparing apples to oranges—the iPad tablet to the Kindle or Nook eReaders—Apple seems to be holding its own. Writer Mike Shield on the AdWorks web site reports that “global sales of computer tablet devices like the iPad will exceed 80 million by 2012, according to a new report from eMarketer. The research predicts that after 15.7 million tablet devices are purchased in 2010, in just two years sales will balloon by 418 per cent to 81.3 million units worldwide.” Shield adds, “After introducing the wildly popular device just this past April, Apple is expected to sell 13.3 million iPads in 2010 … By 2012, sales should reach a staggering 56.1 million units.”

Additional competitive muscle flexed when Amazon and Barnes & Noble announced this year that they planned to expand or launch publishing platforms for indie authors and publishers.

Amazon’s digital foray—using print publishing sites such as CreateSpace and AmazonEncore— and its Digital Text Platform for eBooks caused ripples throughout the publishing industry over the last couple of years. This company reportedly garners seventy percent of all eBook sales. As one of the largest online book sources, Amazon claims its eBook sales have already surpassed hardcover sales earlier this year, and they expect digital book sales to exceed other print markets in the near future

Jeff Bezos, Amazon’s CEO, told a Publisher Weekly reporter last July, “We’ve reached a tipping point with the new price of Kindle—the growth rate of Kindle device unit sales has tripled since we lowered the price.” Bezos added, “In addition, even while our hardcover sales continue to grow, the Kindle format has now overtaken the hardcover format. Amazon.com customers now purchase more Kindle books than hardcover books.”

To garner a part of this digital publishing market, B&N announced last May they are “extending its deep and longstanding tradition of supporting authors and publishers with PubIt! … an easy and lucrative way for independent publishers and self-publishing writers to distribute their works digitally through Barnes & Noble.com and the Barnes & Noble eBookstore.”

Meanwhile, Google added its own muscle to the competitive eBook fight by launching their Google eBookstore where readers can browse a collection of three million titles. Customers can make purchases from this growing bookstore, keep those books in their own eBook library, and read from an array of digital devices—laptops, netbooks, tablets, and e-readers (except for Kindle). Free apps for Apple and Android devices will also be available. A Google press release states that customers will be able to “access your eBooks much like you access Gmail or photos in Picasa—using a free password-protected Google account with unlimited eBook storage.”

And so goes the digital publishing war in 2010.

All this to say, “What is Santa sticking in your stocking?” As prices lower—and before stocks are depleted—maybe your very own Santa is out there right now snatching up a digital present to stick under your tree. Which eReader are you hoping to see under the tree Christmas morning?